AUD/USD Outlook: recovery shows initial signs of stall; downbeat data weigh

Slobodan Drvenica Windsor Brokers

AUD/USD

The Australian dollar edged lower in early European trading on Thursday after upside attempts stalled Fibo barrier at 0.6762 (23.6% of 0.7032/0.6678) in delayed reaction on negative data.
Australian retail sales fell by 0.5% in Dec vs -0.2% f/c and 1% rise previous month, in the worst month since Aug 2017, as retailers were hit by bushfires in south-eastern coast of Australia.
Strong two-day recovery from 0.6678 low (4 Feb) showed initial signs of stall on Tuesday’s strong upside rejection 0.6774 spike high) and subsequent dip that ended in daily close below falling 10DMA (0.6753).
Daily techs are mixed as momentum is heading north, although still in the negative territory, while RSI is in sideways mode and MA’s setup is overall negative.
Near-term action remains pressured by falling thick 4-hr cloud, which capped Wednesday’s trading and continues to weigh, adding to signals of possible recovery end.
Repeated close below 10DMA would increase downside risk and open way for fresh weakness.
Conversely, close above 0.6762 Fibo barrier would improve near-term structure and bring in focus key barriers at 0.6810/13 (falling 20DMA / Fibo 38.2% of 0.7032/0.6678 fall).

Res: 0.6762; 0.6774; 0.6790; 0.6813
Sup: 0.6737; 0.6726; 0.6715; 0.6678

Interested in AUD/USD technicals? Check out the key levels

1. R3 0.6824
2. R2 0.68
3. R1 0.6772
PP 0.6748
1. S1 0.672
2. S2 0.6696
3. S3 0.6668

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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